Tax revenue shortfall at Rs196b: Dar

ISLAMABAD: While defending the PML-N government decision of additional taxation measures, Finance Minister Ishaq Dar on Thursday disclosed that the country’s top tax machinery is facing a revenue shortfall of around Rs196 billion.

“We have taken additional revenue measures which will generate a revenue collection of Rs46 billion for the government exchequer,” the minister told the National Assembly in response to queries of fellow legislatures who came down hard on the government for denying full benefit of falling oil prices to domestic consumers.

Dar did not mention any inefficiency and corruption in the tax department and placed the full responsibility of shortfalls with falling international oil and commodities prices.

The Federal Board of Revenue (FBR) tax target, he said was reduced from Rs2,810 billion to Rs2,691 billion, a shortfall of Rs119bn witnessed in the first half year.

Dar said the increase in GST on petroleum products and changes in other taxes is imperative to meet various needs including release of funds to the provinces.

“We cannot ignore expenditures in the wake of Operation Zarb-i-Azb, debt servicing and payment of salaries,” the minister remarked.

He defended the govt’s decision of raising the GST rate to 27 per cent on petroleum products from 17 per cent.

“The constitution empowers the executive to enhance different taxes including GST and regulatory duties,” he pointed out while responding to the opposition’s criticism of imposition of additional GST on PoL products and an increase in duties on other items.

“The imposition of duty and taxes through statutory regulatory order (SRO) does not undermine sovereignty of the parliament,” he said.

The finance minister stated that article 77 of the Constitution empowers the government to levy tax without the involvement of parliament.

He said regulatory duty of up to 35 per cent was imposed by past governments, while the present government has only imposed a 5 per cent duty.

Dar claimed that the govt has provided relief to the people on petroleum products by 37.68 per cent since August 31 last year.

He said that petrol was available in Pakistan at the lowest price in South Asia, elaborating that in India petrol price is Rs103.45 per liter, Sri Lanka Rs91, Nepal Rs102 and Pakistan Rs70 per liter, respectively.

The minister also said that the government has raised the GST to 27 per cent but would generate around Rs28bn in additional revenue for the exchequer as against the expected shortfall of Rs68bn from petroleum products because of falling prices.

Dar said the cumulative recovery from additional sales tax and regulatory duties will generate Rs46bn for the government exchequer.

He said a regulatory duty was imposed on imported drinks, chocolates, cosmetics, electronics, which according to him was mostly used by the rich people.

The minister stated that all parliamentarians were issued tax numbers and claimed that every parliamentarian was paying their taxes.

Dar said there will be no NTN number for tax filers from July 1, 2015 this year and instead CNIC number will be used.

“NTN will be necessary only for companies and associations,” he added.

Meanwhile, former PPP finance minister, Naveed Qamar alleged that the government had no respect for the sovereignty of parliament as it was imposing taxes without taking it into confidence.

He urged a trickle-down effect of reduction in oil prices to the people and rejected all tax increases by the government, demanding their immediate withdrawal.

MQM’s Rashid Godil was of the view that GST and regulatory duties are regressive taxes and that the tax collection system should be improved instead of imposing more taxes.

JamaatiIslami MNA SahibzadaTariqullah said that reduction in the prices of edible items and other commodities should be ensured as a result of price reduction of petroleum products.

Shaikh Rashid Ahmad said the reduction in international oil prices was a blessing and that its benefits should be passed on to the common man.